COMPLIANCE
& REIMBURSEMENT ADVISORsm
December
2003
Lamar
Blount,
Editor
©
2003 Noel Services, Inc. All rights
reserved.
No reproduction or
redistribution permitted without prior written
authorization.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~
MEDICARE
REFORM LEGISLATION SPELLS "RELIEF" FOR SOME
MEDICARE
ESTIMATES $11.6 BILLION IN PAYMENT ERRORS
HIPAA
RESOURCES FOR COMPLIANCE & COMPLAINTS
BENEFICIARIES
CAN CHALLENGE COVERAGE DECISIONS
NEW
EMTALA ENFORCEMENT GUIDANCE
MEDICARE
SETS 2004 OUTPATIENT APC RATES
CMS
PROPOSES PPS FOR INPATIENT PSYCHIATRIC FACILITIES
CORRECTIONS FOR MAMMOGRAPHY AND OP THERAPY
NEW
HOME HEALTH GROUPER NOW AVAILABLE
SOX
RISKS EXPANDS TO NON-SEC ORGANIZATIONS
~~~~~~~~~~~~~~~~~~~~~~~~~~~~
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MEDICARE
REFORM LEGISLATION SPELLS "RELIEF"
FOR SOME
The
2003 Medicare Prescription Drug and Modernization Act
of 2003 reform legislation contains the
broadest expansion of Medicare since its inception 38 years ago.
The major headlines have been about the voluntary prescription drug
benefit for seniors beginning in 2006, additional drug coverage federal
subsidies for low-income Medicare beneficiaries, plus a Medicare-backed discount
drug card in 2004 and 2005. Here’s a summary of many of the other major
provisions:
Physicians
- Avoid
the 4.5% reimbursement cut
planned for 2004 and get a 1.5% increase in 2004 and at least another 1.5% in
2005. All areas with geographic
adjusters below 1.0 will have be raised to 1.0 from 2004 through
2006. Medicare will pay a 5% bonus to physicians providing care in scarcity
areas from 2005 through 2007, plus there is a 15% bonus for local physicians
and visiting specialists providing hospital outpatient services in Critical
Access Hospitals. Future
sustainable growth rates (the SGR) will be calculated using a 10-year rolling
average of the Gross Domestic Product, resulting in less volatility in the
yearly updates. $1
billion of funding for 2005 through 2009 to reimburse physicians and
hospitals for care provided under the Emergency Medical Treatment and
Active Labor Act.
Hospitals
- Permanently extends the
standardized amount (or DRG base payment rate) for rural hospitals and
hospitals in cities under 1 million by 1.6%, up to the large urban payment
rate. Disproportionate Share (DSH)
payments increase in April 2004 for small rural and urban hospitals by more
than doubling the amount of allowed payments (5.7 to 12% of total Medicare
inpatient payments). Medicaid DSH
payments are increased 16%. Critical Access Hospitals (CAH) will be
paid costs plus 1%; adds a 15% bonus for local physicians and visiting
specialists providing hospital outpatient services; and extends coverage of
costs to retain emergency on-call providers to physician assistants, nurse
practitioners and clinical nurse specialists.
Indirect Medical Education payments for teaching hospitals
increases over the next three years.
$1 billion of funding for
2005 through 2009 to reimburse hospitals and physicians for care provided
under EMTALA.
Other Providers - Therapy
caps will not apply in 2004 or 2005. Home Health Agencies
receive a 5% add-on for rural payments. Durable medical equipment have
a three-year freeze on payment rates and cuts to the top five DME
items and services. Labs have a 5-year payment freeze.
Rural Ambulance providers get an across the board 1% hike for two and a half
years; urban ambulance payments go up 2%.
Action
Tip: Help your Board, Medical Staff and Management team understand
this new legislation. Click
here for the Summary from the Conference Committee.
Click
here for a basic PowerPoint presentation that you can use for your Board,
Medical Staff and others.
MEDICARE
ESTIMATES $11.6 BILLION IN PAYMENT ERRORS
CMS estimates that 5.8 percent of all Medicare payments were made in error in
FY03. This year's report identifies error rates by carrier and intermediary,
provider type, and service type. This
year CMS launched the expanded effort, reviewing approximately 128,000 Medicare
claims to learn more precisely where errors are being made.
The
methodology includes randomly selecting a sample of claims submitted in 2002;
requesting medical records from providers who submitted the claims; and
reviewing the claims and medical records to see if the claims complied with the
Medicare coverage, coding, and billing rules. CMS will take significant steps to
further reduce the error rate, using the far more detailed information as a
guide and will focus on contractors and providers with particularly high error
rates.
As
shown by the new detail in this year's report, the provider types that had the
most errors nationally were chiropractors (11.3%), physical therapists
(18.2%) and internists (13.5%). Providers with the lowest errors
were ambulance services (4.7%), podiatrists (4.0%) and urologists
(5.3%).
Action
Tip: Click
here to read the CMS Error-Rate Report to see how well your Carrier or
Intermediary performed, and how your specialty compares to others.
Then you can anticipate Medicare's future investigations that may affect
your organization.
HIPAA
RESOURCES FOR COMPLIANCE & COMPLAINTS
October 16, 2003
was the deadline for covered entities to comply with HIPAA’s electronic
transactions and code sets provisions. Now there is an electronic tool (at https://htct.hhs.gov/
) called the ASET system, for individuals or organizations to register and fill
out a complaint against an entity whose actions impact the ability of a
transaction to be accepted and/or efficiently processed.
OHS will notify the entity involved in the dispute that a complaint has
been filed against them. Following notification of a valid complaint, OHS will
facilitate resolution of the dispute.
Anyone
can use ASET to file a transaction and code set complaint. Before filing a
complaint with OHS, all covered entities should read OHS' enforcement approach
to compliance with the transactions and code sets after
October 16, 2003
. The compliance document, as well as many other valuable resources, are
available on the
CMS'
HIPAA
website at www.cms.hhs.gov/hipaa/hipaa2 .
Filing
a HIPAA transaction complaint with OHS should be a last resort effort to resolve
your trading partner dispute after consulting various HIPAA resources. For
technical assistance on specific transactions and code set issues, refer to the
official HIPAA Implementation Guides available for download at the Washington
Publishing Company website at www.wpc-edi.com
. You may also seek answers to technical questions from the organizations
responsible for developing the standards. For assistance with the ANSI
X12
transactions, go to the
X12
website at www.X12.org . For
technical assistance with the National Drug Codes standards, go to the NCPDP
website at www.ncpdp.org
.
ASET
is not be used to file a HIPAA privacy complaint. Privacy complaints should be
directed to the Office for Civil Rights (OCR), the federal agency responsible
for enforcing HIPAA Privacy requirements. Go to http://www.hhs.gov/ocr/privacyhowtofile.htm
for more information on filing a privacy complaint.
If you are a patient, please attempt to resolve the issue with the
provider and payer prior to registering a complaint.
If
you are uncertain about your “covered entity” status, or would like
clarification on other HIPAA related issues, contact CMS for additional help at
the HIPAA Hotline at
1-866-282-0659
or submit your questions by email to CMS at askhipaa@cms.hhs.gov.
Action
Tip: Need a
Position Description? Click
here for a HIPAA Complaince Coordinator job description provided by
the HFMA Healthcare Compliance Forum, and then customize this template for your organization.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~
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~~~~~~~~~~~~~~~~~~~~~~~~~~~~
BENEFICIARIES
CAN CHALLENGE COVERAGE DECISIONS
Medicare
beneficiaries can now challenge Medicare national and local coverage decisions
that they find unreasonable, according to a recent CMS final rule that is
effective
December 8, 2003
. Restrictive physician
certification rules have been dropped and now certification that a service is
necessary can simply be in the form of a written order or another component of
the medical record. Also, physicians are not required to predict that payment
would be denied.
An
administrative law judge (ALJ) will initially review beneficiary appeals of
local coverage determinations (LCDs) and the HHS Appeals Board will review
appeals from national coverage determinations (NCDs) and LCDs. Finally, the
beneficiary can appeal the board's decision in a federal court.
The
final rule expands the current appeals process, which only permits beneficiaries
to challenge individual claim denials. Under the final rule, Medicare
beneficiaries have the authority to challenge an entire policy or specific
provision and not just one claim.
Action
Tip: Click
here to read the final rule on Medicare beneficiary appeals and then consider
whether your recent denials
are good appeal cases, based on these new rules. Consult with legal
counsel if you have a significant amount at risk.
NEW
EMTALA ENFORCEMENT GUIDANCE
The
Centers for Medicare & Medicaid Services recently issued a memorandum
providing interim guidance to CMS regional offices concerning enforcement of the
Emergency Medical Treatment and Labor Act (EMTALA) final rule that was effective
November 10, 2003
. This memorandum summarizes the provisions of the final rule and clarifies CMS'
policy regarding when a patient is "stabilized" as well as the
hospital's EMTALA obligation to inpatients.
CMS surveyors
will use the interim guidance and CMS' current Interpretative Guidelines for
EMTALA to assess whether a hospital is in compliance with the final rule until
it issues Revised Interpretative Guidelines. Enforcement of EMTALA will continue
to be initiated only by complaints.
Action
Tip: Go to http://www.cms.hhs.gov/medicaid/survey-cert/sc0410.pdf
to read the CMS guidance and
consider an inservice for your Emergency Department staff and other related
personnel to be sure they understand EMTALA requirements.
MEDICARE SETS 2004 OUTPATIENT APC RATES
The 2004 payment
rates (effective January 1, 2004) are based on actual hospital costs derived
from 2002 claims for outpatient services and increase aggregate payments for
outpatient services by about 4.5% and there will be no across-the-board
reduction payments for drugs, biologicals, and devices (called pass-through
payments).
Under the final
rule, seven drugs and biologicals, and two device categories that met the
criteria for transitional pass-through payments in 2002 and 2003 will come off
the pass-through list in 2004. In the final rule, CMS has decided to package
drugs with daily median costs below $50 as well as the cost of all implantable
devices into the payment rate for the primary procedure or treatment with which
the products are usually furnished.
CMS is creating
separate APCs for drugs and biologicals with median costs at or above $50 and is
setting payment rates for drugs and biologicals based on hospital cost data.
However, for some products, including some less frequently used drugs, the
payment rates based on the hospital cost data would significantly reduce payment
to the hospital, compared with 2003 payment levels. As in the 2003 OPPS update,
the rule will dampen the effect of the reduction for products for which the
median costs decreased by 15 percent or more.
CMS also says
that they will not provide new E/M level guidelines any earlier than January
2005, and will provide six to twelve months' notice before implementing any
new E/M codes and guidelines. Descriptions for Q0081, Q0083, and Q0084 will not
be changed to “per day,” as proposed, but will remain “per visit.” Until
national guidelines are in effect, local medical review policies will apply.
Chemotherapy administration HCPCS code Q0085 will no
longer be payable under OPPS, so providers should report Q0083 and Q0084 when
chemotherapy by both infusion and other techniques is provided in the same
visit. The APC payment rate for Q0081 and Q0084 will be lower in 2004, and while
providers will be able to report both Q0083 and Q0084 in lieu of Q0085, the
total payment for these codes will be much lower than the current payment rate
for Q0085.
Although CMS had proposed a 10% or greater reduction in
payment rates for blood and blood products, it continues to pay separately for
blood, blood products, and hemophilia clotting factors and freezes their payment
rates at the 2003 levels.
CMS sets the threshold for outlier payments under the OPPS
at 2.60 times the APC payment rate, but sets a separate outlier threshold (3.65
times the APC payment rate) for community mental health centers in an attempt to
prevent further disproportionately high outlier payments to this group of
providers.
Action
Tip: Go
to http://www.cms.gov/regulations/hopps/2004f/
to read the final OPPS rule and
then determine the financial
impact on your organization.
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~~~~~~~~~~~~~~~~~~~~~~~~~~~~
CMS
PROPOSES PPS FOR INPATIENT PSYCHIATRIC FACILITIES
The Centers for Medicare & Medicaid Services (CMS) has proposed a new
Medicare prospective payment system (PPS) for inpatient psychiatric facilities
to replace the existing cost-based payment system over a three-year transition
period. The inpatient psychiatric PPS will affect about 2,000 facilities,
including freestanding psychiatric hospitals and hospital-based, certified
psychiatric units.
The
proposed IPF PPS was developed using regression analysis on data obtained from
the 1999 cost report file and 1999 MEDPAR stays for IPFs. The effective date for
implementing IPF PPS is for cost reporting periods beginning on or after
April 1, 2004.
The Proposed Federal Per Diem
Base Rate is $530.00.
Under
the proposed rule, the base rate will be adjusted for each patient's condition,
and the per diem rate will be further adjusted for each day up to the eighth day
to reflect the number of days the patient has been in the facility. The proposed
base per diem amount will cover nearly all labor and non-labor costs of
furnishing covered inpatient psychiatric services - including routine, ancillary
and capital costs. The proposed per diem will not, however, include the costs of
bad debts and certain other costs that are paid separately.
The
rule includes a proposal to make additional payment for outlier cases and a
policy to combine the readmission of interrupted stays with previous admissions.
Comments will be accepted until
January 27, 2003
, and the final rule will be published in 2004.
Action
Tip: Use CMS'
useful (and free) resources to get prepared. Click on the links below
for:
Basic
budgeting information for the new PPS
Individual patient assessment
tool
CMS
web page for the Inpatient Psychiatric Facility (IPF) PPS
The
full text of the proposed rule
CORRECTIONS FOR MAMMOGRAPHY AND OP THERAPY
CMS recently
discovered that PS&R reports were not updated to reflect all of the new
HCPCS codes for mammography and outpatient therapy services paid based on a fee
schedule during calendar years 1999, 2000, or 2001. As a result, a number of
mammography and therapy claims paid based on the fee schedule were commingled
with cost-reimbursed services on the PS&R and the cost reimbursed payments
were not accurately reflected.
FIs are required to reprocess claims since
January 1, 1999
, and include the data in corrected PS&Rs. Settled cost reports will not
be reopened by the FI, but they may be reopened if the provider requests it. To
reopen a settled cost report, providers should submit verifiable documentation
to justify their request. In addition, the request must fall within the
reopening period allowed by 42 CFR 405.1885.
Action
Tip: Go to http://cms.hhs.gov/manuals/pm_trans/A03071.pdf
to read the full text, determine if Medicare's error improperly reduced your
reimbursement, and if so, you need to request a reopening for any prior cost
report periods.
NEW
HOME HEALTH GROUPER NOW AVAILABLE
The
newest version of the Medicare Home Health PPS case mix grouper software and
documentation is now available. This latest version (1.05), which accommodates
changes in OASIS reporting requirements, became effective
October 1, 2003
. Grouper coding logic, test records, and demonstration programs are also at the
web site.
Action
Tip: Go to http://www.cms.hhs.gov/providers/hhapps/
and scroll down to “Home
Health PPS Grouper Software and Documentation” under the
Prospective Payment System Coding and Billing section.
SOX
RISKS EXPANDS TO NON-SEC ORGANIZATIONS
Directors
of private corporations must adhere to the same standards of due care and
loyalty as directors of public, according to a recent US District Court ruling that
the former CEO and chairman and several directors of a privately held company
were liable for more than $40 million in damages.
Although non-public companies are not governed
by Sarbanes-Oxley, directors and officers for many organizations are
implementing SOX-type provisions to avoid the spotlight of scandal. Also, many
directors of non-SEC organizations are becoming concerned about the implications
of the recent decision in
Pereira
v. Cogan. Go to http://www.ffhsj.com/cmemos/030620_pereira_cogan.pdf
to read about this recent case.
Judge Robert W. Street's ruling in this case
significantly expands the responsibilities and liabilities of private companies.
Sweet ruled that “[D]irectors
will not be excused from liability if they either (1) knew about the challenged
[transaction] yet unreasonably failed to take action; or (2) if they did not
know, should have taken steps by which they would have been informed.”
The
court also concluded that the persons functioning as the general counsel and
chief financial officer could have prevented the corporation from extending
illegal loans and making certain illegal payments by notifying the directors of
such proposed actions. Accordingly, the non-director officers were found to have
breached their fiduciary duties and were held liable for the challenged loans
and payments.
Action
Tip: The
nationally recognized law firm Fried,
Frank, Harris, Shriver & Jacobson
has advised their clients that private company directors should be mindful
to exercise the same standards of due care and loyalty as public company
directors and should exhibit skepticism, diligence and a willingness to ask
tough questions, fully inform themselves in a deliberate manner with respect
to all board decisions (including decisions not to act), and seek the advice
of independent experts when considering matters of material importance to
the corporation or when considering matters that are outside the board's
area of expertise.
Private
company directors should also insist that adequate records be kept of board
deliberations and actions, that board meetings be held regularly and that
they receive all relevant and necessary information in advance of board
meetings. Also, the fact that a director had no self-interest, and did not
stand to profit personally from the actions of the alleged malfeasors, will
not of itself protect the director.
The
Sarbanes-Oxley Act requires public companies to provide a confidential
system for employees to report malfeasance. Such reporting systems typically
include a telephone hot line. Click
here for more information on hotline services to cover SOX, HIPAA and
other compliance risks.
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"The
star which they had seen in the east went before them, till it came and stood
over where the young Child was. When they saw the star, they rejoiced with
exceedingly great joy" - Matthew 2:9-10
Merry
Christmas from
Strategy Advisor News !!!!!!
____________
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sources believed reliable, individual situations can vary; therefore the
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